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Sweden's squeaky-clean image sullied by scandals

STOCKHOLM — Up north, where the air is fresh, traffic orderly and the government efficient, corruption has no home. Or does it?

A slew of alleged bribery scandals involving major Swedish companies has surfaced in recent months, challenging Sweden's image - both at home and abroad - as virtually squeaky clean.

The country's new anti-corruption chief, Christer van der Kwast, is looking this week into allegations that Saab offered huge, secret "commissions" to promote the sale of its Gripen fighter jet to the Czech Republic and Austria.

At the same time, the Swedish construction company Skanska has become the focal point of a growing scandal in Argentina, which threatens to engulf the government of President Néstor Kirchner.

In 2005, several Swedish companies, among them Volvo, Atlas Copco and Scania, were caught up in investigations in the United States into alleged kickbacks to Saddam Hussein's regime under the United Nations' oil-for-food program, which allowed Iraq to sell oil to buy civilian goods.

At least part of the problem, most experts say, lies with the fact that Sweden has a strong export industry - and many executives apply a different standard abroad than they do at home.

"One common defense is that bribes are a necessity abroad, that it's simply the way business is done," said Daniel Wasterfors, a sociologist who has studied the behavior of Swedish businessmen in Eastern Europe. "Crossing the border means that they don't feel inhibited any more."

Sweden has generally maintained an attitude of "can't happen here," even as bribery charges have grabbed headlines in other European countries, involving global giants like Siemens of Germany and Total of France.

In Transparency International's Corruption Perceptions index, Sweden consistently ranks among the countries perceived to have the fewest problems: In 2006, it ranked No. 6, behind Iceland and New Zealand, but ahead of both Norway and the Netherlands.

"There has been a belief here that corruption is no problem," said van der Kwast, a chief prosecutor and the first director of the newly created National Unit Against Corruption in Sweden. "Now that's changing."

This past week, van der Kwast met in The Hague with prosecutors from Britain, Switzerland, the Czech Republic and Austria to coordinate their investigations into Saab and the British defense giant BAE. The two companies are alleged to have offered go-betweens as much as 1 billion kronor, or $150 million, to promote the sale of the Gripen fighter, manufactured by Saab and marketed in a joint venture with BAE, to the Czech Republic and Austria.

Helena Stalnert, a spokeswoman for Saab, said the company was "cooperating fully with the investigation." But she said that "in our opinion, no irregularities have taken place."

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During an interview in his Stockholm office, van der Kwast called the investigation "very big," and said it would last into autumn. The charges were first aired in February on Swedish television. Van der Kwast also said he was following the Skanska case closely, although he had not opened an investigation yet.

Skanska's Argentine Operation, Skanska Latin America, is alleged to have paid several million dollars in kickbacks to secure the concession of the Northern Gasoduct pipeline expansion, which was granted by the Argentine government to the company in 2005. In late March, a raid of Skanska's offices in Buenos Aires was ordered by investigating judges. On May 3, the investigation was expanded to include suspected payments to public officials, specifically at the ministry of planning, which is led by a close ally of Kirchner, Julio De Vido.

On Tuesday, six former Skanska managers, as well as a former consultant to the company, were arrested for tax evasion in connection with the case. Local media also reported that six more former or current Skanska employees were sought by the police.

A Skanska spokesman, Peter Gimbe, said that the company had acted quickly to investigate the allegations and was working closely with the Argentine authorities. No one from the company's headquarters in Solna, outside Stockholm, has been implicated, but Gimbe acknowledged that the case was not good for Skanska's reputation.

"If there's one thing we don't like, it's corruption," he said. "But clearly something has happened and now our focus is to make sure it doesn't happen again."

Corruption is not only restricted to Swedish companies doing business abroad, as a number of domestic scandals have made clear. The most publicized involved the state-owned liquor monopoly Systembolaget, in which store managers received bribes in exchange for having certain products offered in stores across the country. Several people have been convicted, but trials are still ongoing.

Despite such cases, the realization that corruption is a real problem in Sweden has been slow to take root, according to van der Kwast.

The anti-bribery convention of the Organization for Economic Cooperation and Development, or the OECD, has been part of the Swedish legal code since 1999. But while the organization finds that Sweden has made "commendable" efforts to implement the convention, its latest report, from 2005, specifically criticized Sweden in the area of corporate bribery of foreign officials. "Companies are rarely held liable in Sweden," the report states.

Van der Kwast's unit was created in 2003, but was made permanent only last year. "It has taken 10 years, from the time corruption began to be highlighted internationally, for the issue to gain traction here," he said. "Now you're beginning to see anti-corruption policies from companies and the government, but it remains to be seen how wholehearted they are."

According to van der Kwast, the realization that rich countries like Sweden are a part of the problem, and therefore have to be part of the solution, is necessary if corruption is not to be an even more serious problem in an increasingly globalized world.

"You hear people say that corruption is something they have in Africa, in South America, in Asia, but corruption takes two sides to happen," he said. "The world is shrinking, and our big companies will face this problem more and more. They will have to learn to deal with it."